Legal

Legal Obstacles Persist for Uber and Grab’s Deal

Legal Obstacles Persist for Uber and Grab’s Deal

The Southeast Asian business of Uber Technologies, which has been taken over by the transport company Grab, could be complicated by scrutiny on regulations, according to analysts and lawyers. However, analysts have also claimed that Uber could simply chose to exit the region, which the authorities won’t be able to do much about.

Last week, the two companies announced the deal but the Singaporean and Filipino antitrust agencies said they would be reviewing the agreement, with Malaysian counterpart also announcing the same.

If Grab was willing to have stricter regulations imposed on itself, as well as provide price restrictions and other concessions, than it would be possible for Grab, based in Singapore, to appease the regulators, according to antitrust lawyers. Not only that, Grab could also make the argument that many ride-hailing options will still be available to people living in the region.

According to Gerald Singham, who’s the deputy managing partner at law firm Dentons Rodyk, has said that it is possible for the deal to still go through. If proper safeguards were implemented and the right commitments were made, there wouldn’t be a need to abandon the deal, with new entrants coming to the fore as well.

Experts have also emphasized that Uber could just leave Singapore, if the deal cannot materialize because of regulations and Grab would then be able to assert its dominance anyway. Drivers and customers alike, have been asked to transition to the platform provided by Grab, with around five hundred staff members also migrating from Uber, as the company’s regional operations are in their last stage.

No one has really been able to assert dominance in the ride-hailing market of Southeast Asia, however, in all the big economies of the region, Grab has been ranked ahead of Uber in terms of users actively using their services each month, by mobile data analytics firm App Annie. Only in Indonesia, Grab falls behind Go-Jek which is backed by Tencent Holdings.

According to a person familiar with the deal, but not authorized to speak to the media, the deal could cause a monopoly which could be bad for consumers, as it will bring with it increased prices and the antitrust issue meanwhile, aims to minimize this effect. However, the person said that there was a diverse group operating in the taxi market, thus consumers did have other options. A similar messages was echoed by Ming Ma, who’s the president of Grab.

Uber has lost $700 million in a business battle with Grab that has lasted for five year, before it decided to sell the operations, including its food-delivery services, in Southeast Asia to the Singapore-based company. Uber has traded its exit from the regions for a 27.5 percent share in Grab, which is valued close to $6 billion.

It was also reported earlier this week that Go-Jek is expanding its operations globally, as it is planning on soon coming to Singapore. The company is said to be considered as a competitor in the investigation being conducted by Singapore’s antitrust agency.

 

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